[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2550.407d-5]

[Page 499-500]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2550_RULES AND REGULATIONS FOR FIDUCIARY RESPONSIBILITY
--Table of Contents
 
Sec. 2550.407d-5  Definition of the term ``qualifying employer security''.

    (a) In general. For purposes of this section and section 407(d)(5) 
of the Employee Retirement Income Security Act of 1974 (the Act), the 
term ``qualifying employer security'' means an employer security which 
is:
    (1) Stock; or
    (2) A marketable obligation, as defined in paragraph (b) of this 
section and section 407(e) of the Act.
    (b) For purposes of paragraph (a)(2) of this section and section 
407(d)(5) of the Act, the term ``marketable obligation'' means a bond, 
debenture, note, or certificate, or other evidence of indebtedness 
(hereinafter in this paragraph referred to as ``obligation'') if:
    (1) Such obligation is acquired--
    (i) On the market, either--
    (A) At the price of the obligation prevailing on a national 
securities exchange which is registered with the Securities and Exchange 
Commission, or
    (B) If the obligation is not traded on such a national securities 
exchange, at a price not less favorable to the plan

[[Page 500]]

than the offering price for the obligation as established by current bid 
and asked prices quoted by persons independent of the issuer;
    (ii) From an underwriter, at a price--
    (A) Not in excess of the public offering price for the obligation as 
set forth in a prospectus or offering circular filed with the Securities 
and Exchange Commission, and
    (B) At which a substantial portion of the same issue is acquired by 
persons independent of the issuer; or
    (iii) Directly from the issuer at a price not less favorable to the 
plan than the price paid currently for a substantial portion of the same 
issue by persons independent of the issuer;
    (2) Immediately following acquisition of such obligation,
    (i) Not more than 25 percent of the aggregate amount of obligations 
issued in such issue and outstanding at the time of acquisition is held 
by the plan, and
    (ii) At least 50 percent of the aggregate amount referred to in 
paragraph (A) is held by persons independent of the issuer; and
    (3) Immediately following acquisition of the obligation, not more 
than 25 percent of the assets of the plan is invested in obligations of 
the employer or an affiliate of the employer.

[42 FR 44388, Sept. 2, 1977]